Effects of stress on economic decision-making: Evidence from laboratory experiments
AbstractThe ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions .
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Bibliographic InfoPaper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2014-02.
Date of creation: Mar 2014
Date of revision:
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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
Phone: +44 (0)1786 467473
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Web page: http://www.econ.stir.ac.uk/
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learning; risk aversion; discounting; financial decisions; stress;
Other versions of this item:
- Delaney, Liam & Fink, Günther & Harmon, Colm, 2014. "Effects Of Stress On Economic Decision-Making: Evidence From Laboratory Experiments," Working Papers 2014-03, University of Sydney, School of Economics.
- Delaney, Liam & Fink, Günther & Harmon, Colm P., 2014. "Effects of Stress on Economic Decision-Making: Evidence from Laboratory Experiments," IZA Discussion Papers 8060, Institute for the Study of Labor (IZA).
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
This paper has been announced in the following NEP Reports:
- NEP-AGE-2014-03-30 (Economics of Ageing)
- NEP-ALL-2014-03-30 (All new papers)
- NEP-CBE-2014-03-30 (Cognitive & Behavioural Economics)
- NEP-EXP-2014-03-30 (Experimental Economics)
- NEP-NEU-2014-03-30 (Neuroeconomics)
- NEP-UPT-2014-03-30 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Liam Delaney).
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